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Eli Lilly Raised Its Revenue Guidance for Fiscal 2018

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Revenue guidance for FY 2018

In Eli Lilly’s (LLY) second-quarter earnings conference call, the company raised its fiscal 2018 revenue guidance by ~$300 million from the previously projected range of $23.7 billion–$24.2 billion to $24.0 billion–$24.5 billion. The guidance increased due to the solid performance of the company’s diabetes franchise, recently launched products, and higher collaboration revenues in the first half of 2018. Eli Lilly expects unfavorable foreign currency fluctuations to offset the revenue growth drivers in fiscal 2018.

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Eli Lilly has witnessed multiple favorable milestones for its research pipeline in 2018. On May 15, the company announced that its investigational migraine therapy, galcanezumab, demonstrated efficacy in reducing the rate of episodic headache attacks in a Phase 3 trial. In February, the company announced that Taltz demonstrated efficacy and safety in Ankylosing Spondylitis indication in a Phase 3 study, COAST-V. On June 28, the company announced positive results from the Phase 3 study, COAST-W. Taltz demonstrated its efficacy in patients that experienced difficult-to-treat tumor necrosis.

Wall Street analysts have projected Eli Lilly’s fiscal 2018 revenues to be ~$24.3 billion, which will be a rise of ~6.3% YoY.

Pfizer (PFE), Merck (MRK), and Bristol-Myers Squibb (BMY) are expected to report revenues close to $54.3 billion, $42.4 billion, and $22.2 billion, respectively, in fiscal 2018.

Capital deployment initiatives

Eli Lilly has been focused on implementing several initiatives to create shareholder value. On June 22, Eli Lilly announced the completion of the acquisition of ARMO BioSciences. The deal added the investigational immunotherapy drug, pegilodecakin, to the former’s late-stage oncology pipeline. After reviewing various strategic alternatives, the company has planned an IPO of a minority stake of less than 20% shares of its Elanco Animal Health segment by the end of 2018. On August 2, Elanco filed for IPO registration with the U.S. Securities and Exchange Commission.

Next, we’ll discuss Eli Lilly’s margin growth prospects.

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